Up nearly 85% compared with a year ago
Housing starts in the Calgary region in January were up a whopping amount compared with a year ago, thanks primarily to a booming multi-family sector.
According to Canada Mortgage and Housing Corp., there were 1,328 housing starts in the Calgary census metropolitan area during the month, up 84.7 per cent from January 2013’s 719 units.
It said Monday that multi-family starts soared by 215.5 per cent to 877 from 278 a year ago while single-detached starts were up 2.3 per cent to 451 from 441 units last year.
“Housing starts in January increased well above what was recorded in January 2013. Although single-detached starts also rose, most of the gains in total starts were in multi-family units,” said Richard Cho, senior market analyst in Calgary for the CMHC. “Demand for housing continues to remain robust, supported by employment growth and strong net migration. Inventories for new multi-family units have also declined, also contributing to the up-tick in multi-family construction. Multi-family starts in 2014 are forecast to increase over 20 per cent, with 7,500 units breaking ground.”
CMHC said housing starts in the Calgary CMA were trending at 14,322 units in January compared with 13,996 in December. The trend is a six-month moving average of the monthly seasonally-adjusted annual rates of total housing starts.
“The trend in total housing starts moved higher in January due to increased production in both the single-detached and multi-family markets. The rising trend in housing starts has been supported by heightened net migration and job growth, as well as a decline in new home inventories,” said Cho.
At the national level, Canadian housing starts fell to 180,248 annualized units in January, down from 187,144 in December. On a six-month moving average, starts are running a robust 191,456, said Connor McDonald, economist with TD Economics.
“A slower pace of construction activity to start the year is consistent with the wider theme of domestic fatigue that will inevitably put more pressure on net exports to drive the next stage of Canada’s economic recovery,” said McDonald.
“Underperformance of the Canadian economy relative to the U.S and the likely gradual increase of interest rates through 2015 will take some steam out of the demand for Canadian housing. We suspect that the pace of housing starts will continue their trek downward toward the demographically-supported level through 2015.”
McDonald said the recent cooling of housing starts supports the bank’s view for a soft landing of the Canadian housing market in 2014 and 2015.
Source: Calgary Herald